One of my clients is a home builder. Another company had been doing his search engine optimization, without results.

He switched to working with us for his search engine optimization. Within a few weeks, he began getting phone calls from his website. However, most of the calls were not his ideal clients.

He did high-end, custom work and most of the people calling him were not looking for that quality of work. So, we spent several months getting his website positioned and optimized until the right people started to find him.

The next year, his business doubled from new sales from his website.

Should you immediately do something different with search engine optimization? If your business serves people locally, it might be worth looking into.

When I ran a software company here in Denver, we marketed our software several ways. We used print advertising, direct mail, trade shows, and online marketing, including search engine optimization, banner ads and email marketing.

I carefully analyzed the results of each of our different marketing campaigns. What I found was pretty interesting.

Our most expensive leads came from trade shows. We spent about $150 to acquire each lead from a trade show. When we turned the sales team loose to follow up on that lead, many of them turned out to be a huge waste of time. These expensive leads had a low closing ratio, around 5%.

We did a bit better with print ads. We acquired leads at $20 – $40 each. When we followed up with them, we had a slightly better closing ratio than the trade shows.

The least expensive leads were generated through our online marketing. The leads cost us only a couple of dollars each. We had a high closing ratio, sometimes as much as 40% because they were highly self-qualified leads. They were people looking for a solution to their problem, and they had taken the time to engage with us through our website.

Compare a lead obtained at $150 with a 5% closing ratio to a lead that cost $3 with a 40% closing ratio. The cost of acquiring a client through our online marketing was a tiny, tiny fraction of the cost of acquiring clients through other channels. The gap became even more significant when we factored in the cost of the sales rep’s follow-up on the trade show and print ad leads.

As long as we continued to get a positive return on the trade shows and print ads, we did continue to use those methods. However, we put most of our attention and focus on our online marketing because it gave us our best return. By far.

One of our clients who provides tree trimming and stump grinding services was, and here’s a bit of their story.

When they first came to us, they were spending their marketing budget on several different online programs, including buying leads. They were getting a new customer only occasionally.

They reached out to us because they wanted to try SEO. They allocated a small budget for local SEO. A couple months later, they called up to ask, “Steve, how can we do more of this?”

We sat down and had a conversation to explore their business goals. Based on their growth goals, I recommended a greatly expanded search engine optimization program of $1,000 a month. This was just a huge leap for them and it created a mental barrier until we did the math.

They intended to grow their business by $350,000 the following year. They weren’t sure how they were going to bring in that new business. Until it clicked that a $12,000 investment in their website to bring in $350,000 was probably a pretty good deal.

Well, by the end of the year, we fell a little short of the $350,000, although they did bring in close to $300,000, mostly in new web sales, on their $12,000 investment. That was more than a 2000% return on their marketing investment in terms of sales generated from the website.

Still today, they have a steady stream of quote requests coming in from their website and their business continues expanding and growing.

Does this mean you should rush out and invest in SEO? No, not unless you’re looking for significant sales growth, and you’re in a market where it makes sense. But it can be a very effective tool when done right.

Why do companies spend so much on advertising, when the benefit is so small, while they spend so little on SEO (search engine optimization), when the benefit is so large?

We’re all familiar with the fact that advertising has become MUCH less effective than it used to be. DVRs, DVDs, Netflix, new cable channels, online channels, mp3s, mp4s, ipods and smart phones all compete for a dwindling share of the consumer’s vanishing attention span. However, U.S. companies still spend about $30 on advertising for every $1 they spend on SEO. Why is that?

I believe that advertising is still popular because it is easily understood. Many people would rather spend money on something they know–even though they know it does not work well–than experiment with something they don’t know. Internet marketing requires an explanation. Search engine optimization can be confusing, and because it’s confusing, it’s SCARY.

Certainly, some business owners have bought into SEO programs in the past that were the wrong fit for their business, and not gotten the result they hoped for. (Of course, the same is true for many advertising programs.)

However, SEO, when done right, is MUCH more cost effective than an ad campaign. Perhaps the fact that companies are still spending so much on advertising and so little on SEO is good news after all. It means that there is much less competition for the companies who are investing in quality SEO!

One of the keys to making your website your number 1 employee is actually getting people to your website. Although there are a lot of methods being promoted for getting traffic to your site, here are a few to avoid.

1) Link Directory Submitter

Sure, your Google ranking is affected by who is linking to your website. However, that doesn’t mean that more is better. Link Directory Submitter is bad news for a lot of reasons. First, if your website goes from no inbound links to 2,000+ overnight, don’t you think Google is smart enough to figure out it was done by a software program? And as soon as they do, they will discount all the links. Second, you are known by the company you keep. Not only will it not help your website to have 2,000 inbound links from a Chinese spam farm, it will actually hurt your ranking to be associated with them. A quality link-building campaign is a lot of work, but well worth the effort.

2) Buying canned content

Yes, Google likes to see fresh, relevant content on your website every week. But what they hate to see is the same content repeated on hundreds of different pages. One sure way to get your website de-ranked is to post the same articles that are being sold to lots of other people. If you’re going to blog, hire someone to actually write the content, or better yet, write it yourself.

3) Buying a bunch of domains

Back when a lot of people still had not heard of the Internet (Yes, Virginia, I’m old enough to remember those days), when someone wanted to find a product or service, they would simply type it into the address bar. (JoethePlumber.com anyone?) It made sense then to register a bunch of search-term domains and point them to your site. Nowadays, people use a search engine to find what they want. And, contrary to popular belief, having a bunch of domains pointing to your site has no value for search engine optimization. In fact, if they are pointed incorrectly, you can even hurt your search engine ranking. So, save your $20 and go buy your spouse some flowers instead.

These three methods of “driving traffic” are persistent myths, but myths nonetheless. To learn more about how to actually get good rankings and real traffic to your website, here are some posts that may help.

Last week someone came to me with yet another $50-a-month “SEO” program that they were considering buying. These always make me laugh and cry at the same time. Smart business owners who would never buy shares in the Brooklyn Bridge from a New York street hustler get suckered into these “SEO” programs all the time.

The fact is, real search engine optimization is hard work. It requires someone with experience and skill to spend a significant amount of time in order to get prospective customers to your website. As such, real SEO costs thousands (not tens) of dollars. Yet, when done right, SEO can provide a tremendous return on investment.

If someone on the street corner offered you a Rolex watch for a hundred dollars, there are only two possibilities: (a) it’s stolen, or (b) it’s fake. If someone offers you a hundred-dollar SEO program, the only two options are: (a) there’s no substance and it doesn’t work, or (b) they use some spam techniques that put your website at risk for getting banned from the search engines.

The next time someone offers you shares in the Brooklyn Bridge, or a ridiculously cheap SEO package, I hope you’ll know enough to run the other way.

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